Universal Display reports 3Q 2011 results - net income of $6 million, revenues of $21.8 million

Universal Display reported their 3Q 2011 financial results: net income (and cash flow) of $6 million (this is the first profitable quarter for the company) on revenues of $21.8 million (an increase of 208% compared to 3Q 2010). Commercial revenue was $9.9 million and development revenue was $11.9 million.

Host Materials

UDC has started to offer OLED host materials to complement their emitter materials. They enjoyed high host material sales in this quarter ($7.8 million) - but this is a competitive market as several companies are offering the same kind of materials. The company said that they are looking to "expand the R&D and material business outside of emitters and to other aspects of the stack". Back in March when UDC raised $250 million it was rumored that the company is looking to acquire a company (Novaled was the leading candidate according to the rumors) to expand their business in that way.

Regarding the Samsung deal

UDC signed a long-term license agreement with Samsung in August, and now we have some more details. Samsung is paying a fixed license fee - which increases each year. Samsung will pay them twice a year, and the current payment for 3Q was $3.2 million (which actually covers the time since the beginning of 2011, but it's a rather difficult calculation as Samsung already paid parts of that in royalties...).

On a side note on Samsung, it's interesting to hear that Samsung's manufacturing process keeps getting more efficient, which means that they need less material per display. Samsung's production is growing more quickly than that though, and their emitter sales to Samsung has grown in the past quarter.


UDC decided to start providing financial guidance for the first time. They expect 4Q 2011 revenue to be lower than 3Q 2011 due to seasonal factors. Revenue for the full year 2011 is expected to be between $58 million to $62 million. 2012 revenue will be in the range of $90 million to $110 million.

Patent updates

Just yesterday we heard reports about a European ruling regarding a basic phosphorescent patent in Germany. It was reported that UDC's main patent claim was invalidated. While we still don't have the full transcript of that heading, UDC says that they are "extremely pleased" with the outcome. They had to remove any Osmium reference from that patent, which still stands, and the company will file a revised application for their Osmium related patent. Iridium (which is covered in the patent) is currently the only phosphorescent material that's been commercialized, although UDC and other companies are working on non-iridium materials.

UDC still have other US and worldwide patents regarding other materials (such as platinum). They also claim that the basic phosphorescent patent (which covers all phosphorescent OLEDs) was not the subject of these proceedings.

The company also updated regarding their US legal issues with Fujifilm - UDC acquired this patent application which ended the interference.

Regarding DuPont's nozzle printing license

A few days ago DuPont announced that a 'major Asian AMOLED maker' licensed their nozzle-printing technology for large AMOLED production. UDC says that their materials will apply to this printing technology, and in fact they remind us that DuPont has a license agreement from UDC to actually manufacture inkjet printing displays.

Blue materials update

The company is still working of course on a deep blue PHOLED material for displays. They are offering light blue for lighting (which is probably used in Konica Minolta's all-phosphorescent OLED panels) - which together with their red and green materials can create a warm white. But displays require a deep blue and the company still can't predict when this will be ready.

Source: UDC and Seeking-Alpha

Disclose: The writer of this post holds shares in UDC

Posted: Nov 09,2011 by Ron Mertens